Chipotle Mexican Grill Inc (CMG)

[DowDeva]

Ferda, I don't know your level of knowledge but you might want to start with sellling way out of the money credit spreads on CMG, only on expiration days. For instance, selling the 1070 June 5th call and buying the 1075 would currently net you .25, or 25 dollars.

Trading gurus are always talking about risk/reward ratio, i.e., you don't want to invest a lot of money to make only $25, but one of the best traders I ever saw carefully logged away 25 and 35 at a time, one at a time, risking 500 or even 1000 or 1500, every week. He was betting a lot to make a little very safely.

I watched him hedge too, if he even though the trade was going to go against him. This is because a way OTM credit spread can turn into an in the money credit spread very fast. This is even more true with tech stocks. which more very fast.

He always hedged, even if he was buying, not selling, options. It was about protecting his capital.